Toronto home prices expected to continue to decline as market rebounds elsewhere in Canada: Royal LePage

A recent report suggests the aggregate price of a GTA home in the first quarter was nearly $1.1 million while experts expect another spike in the market.

The housing market could soon rebound across the country but Toronto may continue to see price declines, a new report suggests.

The Royal LePage House Price Survey and Market Forecast shows that while national aggregate home prices went down two per cent year-over-year in the first quarter of 2026, they increased modestly (0.7 per cent) compared to the last quarter of 2025 and are likely to be up one per cent year-over-year by the summer.

However, the same can’t be said for Toronto, where the average price dropped 4.7 per cent in the first quarter of this year. Royal LePage expects housing prices in Toronto to continue to decline in the second quarter, albeit at a modest rate.

Economic challenges and geopolitical uncertainty were to blame for the slow start to the year, the survey noted, with the U.S. and Israel’s war on Iran having a ripple effect on the economy, and in turn the housing market.

In a release, Royal LePage President and CEO Phil Soper added that the sluggish market was also impacted by nervous first-time buyers, “sell-before-buy behaviour” and restricted inventory in prime markets.

GTA’s housing market forecast

While home sales in Toronto increased slightly year-over-year, at the end of 2025, price growth “remains flat”, according to Royal LePage broker Shawn Zigelstein. In a release, he noted that “elevated supply levels keep conditions balanced.”

He said that there’s a slight increase in activity in the condo sector thanks to first-time buyers and downsizers. However, there’s also been a downward trend in inventory since many sellers are deciding to relist their properties at a later time, instead of accepting lower offers. That’s resulting in a “degree of gridlock with buyers and sellers waiting for more favourable conditions to move forward,” he said.

He added that there’s reason to feel optimistic for more market activity this year, thanks to an abundance of inventory and stable pricing. The possibility of an interest rate hike in the face of rising inflation could also help motivate buyers. However, that might be impacted by “broader economic concerns, including job security, which remain top of mind for many consumers.”

In the GTA’s first quarter of 2026, the aggerate price of a house dipped 4.7 per cent year-over-year to $1,091,900. On a quarterly basis, the price spiked ever so slightly to 0.7 per cent.

In Toronto specifically, home price declined 4.8 per cent year-over-year to $1,070,600 for the first quarter of 2026. The average price of a single-family detached home tumbled 9.7 per cent year-over-year to $1,528,900, while condos declined 3.8 per cent to $660,600.

Royal LePage is forecasting the aggregate price of a home in the GTA will go down 4.5 per cent in the fourth quarter of the year, compared to the same time in 2025.